How to Approach the Next 20 Years

Economist Chris Martenson considers the intersection between our economy, energy, and the environment—and how we can navigate the coming changes.

The big story is this: the world has physical limits that we are already encountering, but our economy operates as if none exist. Our economy requires growth. I don't mean require as if it's written in a legal document somewhere, but require in the sense that our economy really only functions well when it’s growing. With growth, jobs are created and debts can be serviced. Without growth, these and many other facets simply and mysteriously crumble causing economic pain and confusion.

In the near future humanity, as a species, will have to grapple with a condition it's never faced before: slightly less and less energy being available each year. In the past, there was always another continent brimming with energy resources to tap, another well that could be drilled, more hydrocarbon wealth that could be brought up from the depths. We've always had access to more and during that long run of history we fashioned an enormously complicated society and global economic model around the idea that there always would be more.

Along the way we moved from burning wood to burning coal, then to whale oil and then to petroleum. The unanswered question is, after oil what comes next? What is the next source of energy? Nobody has a truly viable answer for that as we cross the threshold of peak oil; the moment after which slightly less and less energy comes up out of the ground for us to use as we wish.

Many hold out hopes that technology will ride to the rescue, perhaps in the form of nuclear, natural gas, or alternative sources of energy, but the issues of time, scale, and cost loom large given the late date at which we are finally recognizing the severity and imminence of the petroleum predicament.

With a peak in energy extraction a host of environmental issues suddenly come into play. Agricultural soils that were forced to produce higher yields via the continuous application of fossil-fuel derived fertilizers will be revealed to be fundamentally depleted. Minerals of increasingly dilute concentrations that require more and more energy to produce every year will suddenly cost exponentially more each year to extract and process.

On top of all this, the earth brims with more than 7 billion people, with nearly 80 million more added each year, on its way to 8 or 9 or possibly 10 or more billion people. The combined outputs of carbon into the atmosphere, plastic into the ocean, and a cocktail of hundreds of thousands of new human-made chemicals introduced into the environment with untestable and unknowable effects are creating a death by a thousand cuts effect on our ecosystems.

Where markets once divvied up our energy resources according to ability to pay, in the near future true scarcity will form the dividing line between economic progress and decline for the world's various nations. How soon will all of this happen? If not this year, then within 20 years—a blink of an eye given the scale and scope of the potential disruptions implied by this structural shift.

It's only when we put the challenges we find in the economy, energy, and the environment—what I call the “three Es”—into one spot that we can fully appreciate the true dimensions of our predicament. The next 20 years are going to be shaped by fundamental resource scarcity in ways that we've never experienced in history and the developed world is entering this race economically handicapped with no one to blame but itself.

The primary question is whether we want our future to be shaped by disaster or by design. The set of predicaments and problems we now face are very different from the conditions of the past 20 years and therefore present a solid challenge to the existing status quo. Those currently wielding power and influence are most likely to defend the status quo raising the risk that our future will consist of more disaster than design. Further, abrupt changes have the unfortunate tendency of escaping notice by the majority of people who have been conditioned to expect that the future will resemble the past—a perfectly valid assumption for ordinary times but a liability during extraordinary times.

A lucky few will see the changes coming ahead of time and seize the opportunity to make a more gentle series of adjustments on their own terms, while most will be caught unawares and have a much rougher period of transition. Fortunately, by examining and understanding the ways in which the economy intersects with and depends upon energy and other resources from the environment, it is possible to safely navigate and even predict the coming changes.